Climate neutrality and decarbonisation

Electricity sector
- Mitigation options and accounting challenges -

Peter Holzapfel
Stella Unruh
Prof. Dr. Matthias Finkbeiner
Technische Universität Berlin
Department of Environmental Technology
Chair of Sustainable Engineering
Overview – first part

Date Topic lecture Seminar

16.10. Introduction -
30.10. Decarbonisation strategies Detailed introduction to seminar and
homework assignment and first seminar
task
06.11. Agricultural sector Preparation time
13.11. Double seminar
20.11. Electricity sector Seminar for task 2
– Peter Holzapfel
27.11. Hydrogen & building sector Preparation time
04.12. Double seminar
11.12. Guest Lecture: Climate Anxiety – Dr. Tamara Vukicevic (Charité)
18.12. Transportation sector Preparation time for homework
assignment
Holiday break

Peter Holzapfel 2
Agenda

• GHG emissions – Country level & sectors

• Energy related emission & Renewable energy

• Accounting of electricity related emission

• Challenges for Double Counting

• Nuclear Energy - Input for Discussion

Questions and comments

are always welcome!
☺
Agenda

• GHG emissions – Country level & sectors

• Energy related emission & Renewable energy

• Accounting of electricity related emission

• Challenges for Double Counting

• Nuclear Energy - Input for Discussion

Questions and comments

are always welcome!
☺
Country specific CO2-Emissions
Annual emissions

Peter Holzapfel 5
Country specific CO2-Emissions
Annual emissions

Peter Holzapfel 6
Country specific CO2-Emissions
Cumulated emissions

Peter Holzapfel 7
Country specific CO2-Emissions
Per capita emissions

Peter Holzapfel 8
Country specific CO2-Emissions
Discussion

Which one should be used for Emission reduction targets? Why?

Annual country specific emissions,
Cumulative emission levels
or per capita emission?

Combination?

Peter Holzapfel 9
Production and consumption based emission
accounting

https://pubs.acs.org/doi/abs/10.1021/acs.est.8
• Production based accounting is
used today in all national
accounting schemes
(Kyoto and Paris)

• Consumption based accounting is

mostly used and discussed in
science, but not implemented in

b07071
any policy yet

https://www.pnas.org/content/early/2010
/02/23/0906974107/tab-figures-data
Peter Holzapfel 10
Country specific CO2-Emissions
Production vs Consumption based
• Production and consumption based emissions often differ

• Richer countries often import CO2 intensive goods from less wealthy countries

Peter Holzapfel 11
Country specific CO2-Emissions
Production vs Consumption based
• For many countries production and consumption based emissions develop in
similar direction

• But opposite development also occures

Peter Holzapfel 12
Country specific CO2-Emissions
Discussion

Which one should be used for Emission reduction targets? Why?

Production based or Consumption based

Peter Holzapfel 13
Agenda

• GHG emissions – Country level & sectors

• Energy related emission & Renewable energy

• Accounting of electricity related emission

• Challenges for Double Counting

• Nuclear Energy - Input for Discussion

Questions and comments

are always welcome!
☺
 Background
GHG by sectors - Global

• Over 70% of global GHG emissions are energy related

• Over 39% of energy related emissions can be attributed to electricity

and heat generation

Emissions strongly depend on energy source

Power
39%

Energy
Agriculture 74%
18% Transport
21%

Buildings 8%

Other 6%

[IEA 2021; WRI 2021]

[www.unsplash.com ]

Peter Holzapfel 15
 Background
Renewable energy generation

• Renewable energy generation is expanding

Global renewable energy generation

Peter Holzapfel 16
Peter Holzapfel
Emissions of energy generation

17

https://ourworldindata.org/safest-sources-of-energy
 Background
GHG by sectors – Global

• Electricity related emissions are rising, regardless of the expansion of renewable

energy

→ Rising global living standards

→ Electrification of other sectors (Transport, Industrial processes…)

GHG emissions per sector

Peter Holzapfel 18
 Background
GHG by sectors – Country specific

• Development of electricity related emissions strongly differs among countries

→ Depending on the countries expansion of renewable energy
→ … and its economic development

Germany China

Peter Holzapfel 19
Peter Holzapfel
Current energy consumption by source

https://ourworldindata.org/energy-production-consumption
20
Peter Holzapfel
Interconnection of energy sector

https://www.ren21.net/wp-content/uploads/2019/06/GFR-Full-Report-
21

2017_webversion_3.pdf
Peter Holzapfel
Electricity Generation for 2-degree Celsius scenario

22

IRENA: https://www.irena.org/publications/2021/Jun/World-Energy-Transitions-Outlook
 Renewable Energy Challenges

https://www.agora-energiewende.de/service/agorameter/chart/power_generation/01.10.2020/17.10.2020/today/
• Variable energy sources e.g. wind and solar energy

https://www.agora-energiewende.de/daten-tools/agorameter/chart/today/power_generation/10.08.2020/16.08.2020/hourly

Peter Holzapfel 23
Renewable Energy Challenges

https://library.oapen.org/bitstream/handle/20.500.12657/43272/2020_Book_Klima.pdf?s
• Variable energy sources e.g. wind and
solar energy

• Require energy storage capacity

• Require alternative base load power

sources (e.g. hydropower, nuclear
energy, fossil fuels, geothermal energy)

equence=1#page=144
Peter Holzapfel 24
Renewable Energy Challenges

• Variable energy sources e.g. wind and

solar energy

https://windmonitor.iee.fraunhofer.de/windmonitor_en/3_Onshore/7_karten/
• Require energy storage capacity

• Require alternative base load power

sources (e.g. hydropower, nuclear
energy, fossil fuels, geothermal energy)

• ‘Not in my backyard’: renewable power

plants need space

Peter Holzapfel 25
Renewable Energy Challenges

• Variable energy sources e.g. wind and

solar energy

https://windmonitor.iee.fraunhofer.de/windmonitor_en/3_Onshore/7_karten/
• Require energy storage capacity

• Require alternative base load power

sources (e.g. hydropower, nuclear
energy, fossil fuels, geothermal energy)

• ‘Not in my backyard’: renewable power

plants need space

• Expansion of the transmission and

distribution networks

Peter Holzapfel 26
Agenda

• GHG emissions – Country level & sectors

• Energy related emission & Renewable energy

• Accounting of electricity related emission

• Challenges for Double Counting

• Nuclear Energy - Input for Discussion

Questions and comments

are always welcome!
☺
 Accounting methods for electricity related emissions

• In it’s Scope 2 Guidance, the GHG Protocol defines two different methods to
account for electricity related emissions

Location-based Market-based

… also included in other standards

Sources: www.electricitymaps.com
Peter Holzapfel www.agora-energiewende.de 28
 Location-based electricity accounting

• Everyone in a defined region and time period gets the same

• Sounds quite simple but let´s have a closer look…

Location-based Which region do we define?

Which time period do we define?

Standard solution:
Country specific annual emission
factors
Sources: www.electricitymaps.com
Peter Holzapfel www.agora-energiewende.de 29
 Location-based electricity accounting

• Also … a country´s electricity production mostly is not equivalent with

electricity consumption

Production-based Consumption-based

Sources: www.electricitymaps.com
Peter Holzapfel 30
Location-based electricity accounting

Location-based electricity accounting

Production Mix vs. Consumption Mix in the location-based method

Production Mix

Consumption Mix

Peter Holzapfel 31
Location-based electricity accounting

Location-based In summary:

• Location-based accounting is based on

physical electricity consumption

• Everyone in a defined region and time

period has to account emissions related
to grid electricity consumption using the
same emission factor

→ Electricity contracts play no role in

location-based emission accounting

Sources: www.electricitymaps.com
Peter Holzapfel 32
 Market-based electricity accounting

• Everyone gets what they pay for … also sounds quite simple …

… but lets have a closer look …

Residual Mix

Energy Attribute Certificates (EACs)

Peter Holzapfel 33
 Market-based electricity accounting
Energy Attribute Certificates
Energy Attribute Certificates…
• … typically represent the (renewable)
energy attribute for 1 MWh of electricity
• … are traded within different
EAC-systems
– i.e. Guarantees of Origin (GOs) on Europe or
Renewable Energy Certificates (RECs) in the
USA

• Play an important role in most

renewable electricity contracts
• … can be used over a certain time period
and expire afterwards
(time period: typically after 1 year)
• … can be traded internationally among the
residual mix area

Peter Holzapfel 34
 Market-based electricity accounting
European Residual Mix Area
• European Guarantees of Origin (GOs) can be freely traded in the residual mix
area

Peter Holzapfel 35
 Market-based electricity accounting
Residual Mixes
• How is the residual mix calculated?

Residual Mix

Energy Attribute Certificates (EACs)

Peter Holzapfel 36
 Market-based electricity accounting
Residual Mixes
Residual Mix Calculation
Issuance-based Only outside Residual Mix Area
Issuance based methodology
calculation
method of the
European
GO-System

Calculation steps
have to be
performed for
each individual
country

More about this in

Advanced LCA

Peter Holzapfel 37
 Market-based electricity accounting
Residual Mixes
…The different market-based
Residual Mix Calculation – Issuance based
electricity mixes of the
countries vary significantly…

Peter Holzapfel 38
Discussion

Which method do you prefer?

– location-based or market-based -

Peter Holzapfel 39
 Input for Discussion

• Market-based Energy Attribute Certificates are often relatively cheap

→ currently make up below 10% of total revenues of renewable energy power
plants and prices are fluctuating
→ missing contribution to the energy transition…

• Let’s have a look at a (provocative) example – Different Scope 2 reduction

approaches

Identical location-based Company 1 invests Company 2 invests the same budget

Scope 2 emissions in green EACs in energy efficiency
100 100 100 100
80 80 80 80
Tons CO2eq

Tons CO2eq

Tons CO2eq

Tons CO2eq
60 60 60 60
40 40 40 40
20 20 20 20
0 0 0 0
Company Company Company Company
1 2 1 2

Peter Holzapfel 40
 Input for Discussion

• Market-based Energy Attribute Certificates are often relatively cheap

→ currently make up below 10% of total revenues of renewable energy power
plants and prices are fluctuating
→ missing contribution to the energy transition…

• With the consistent application of residual mixes the difference (typically)

become more pronounced
Identical location-based Company 1 invests Company 2 invests the same budget
Scope 2 emissions in green EACs in energy efficiency
200 200 200
200

150 150 150

Tons CO2eq
Tons CO2eq

150
Tons CO2eq

Tons CO2eq
100 100 100
100

50 50 50
50

0 0 0
0
Company Company Company
Company
1 2 1
2

Why does residual mix application enlarge the Scope 2 differences?

Peter Holzapfel 41
 Input for Discussion

• Everyone in a defined region and time period gets the same

Location-based Sounds quite simple and fair, but…

… electricity consumers have no
possibility to “choose” and
thereby influence their electricity
mix…

… companies located in countries

with low grid emission factor will
always be “better” than
companies with high grid emission
factors…
…i. e. France vs. Poland

Peter Holzapfel 42
Sources: www.electricitymaps.com
Discussion

Did your opinion change?

Do you see any problems when the location-based and

market-based method are applied in parallel?

Peter Holzapfel 43
Agenda

• GHG emissions – Country level & sectors

• Energy related emission & Renewable energy

• Accounting of electricity related emission

• Challenges for Double Counting

• Nuclear Energy - Input for Discussion

Questions and comments

are always welcome!
☺
Challenges of double Counting

Electricity
generation

Grey Electricity
Electricity from RES

Peter Holzapfel 45
Challenges of double Counting
Location-based

Electricity Accounting of electricity consumption

generation
Location-based Which region do we define?
(Green) Electricity
Consumer
Group A

Other Electricity
Consumers
Which time period do we define?

Grey Electricity
Electricity from RES
Total accounted
Electricity Mix

Standard solution:
Country specific annual emission
factors

Peter Holzapfel 46
Challenges of double Counting
Market-based

Electricity Accounting of electricity consumption

generation
Location-based Market-based

(Green) Electricity
Consumer
Group A

Other Electricity
Consumers

Grey Electricity
Electricity from RES
Total accounted
Electricity Mix
…as long as it is
applied
exclusively and
consistently …
Peter Holzapfel 47
Challenges of double Counting
Parallel application

Electricity Accounting of electricity consumption

generation
Parallel
Location-based Market-based
application
(Green) Electricity
Consumer
Group A

Other Electricity
Consumers

Grey Electricity
Electricity from RES
Total accounted
Electricity Mix

Peter Holzapfel 48
Challenges of double Counting
Application in LCA

More about the challanges for LCA

in Advanced LCA

Holzapfel et al (2023): https://doi.org/10.1007/s11367-023-02158-w

Peter Holzapfel 49
Peter Holzapfel
Total energy sector
Renewable Energy in EU 2020 – Target achievement

https://ec.europa.eu/eurostat/statistics-
explained/images/3/35/Renewable_energy_2020_infographic_18-01-2022.jpg
50
Renewable Energy in EU 2020 – Target achievement
Electricity sector

Target reached Target not reached

No Target Non AIB

Peter Holzapfel 51
Renewable Energy in EU 2020 – Target achievement
Electricity sector – including GO trade

Target reached Target not reached

No Target Non AIB

Peter Holzapfel 52
 Renewable Energy in EU 2020 – Target achievement
Electricity sector – including GO trade
• GO trade significantly influences Renewable Energy share and target
achievement of some European countries

Peter Holzapfel 53
 Renewable Energy in EU 2020 – Target achievement
Electricity sector – including GO trade

• Absolute values are dominant by a few countries

Peter Holzapfel 54
Discussion

What does this have to do with double counting?

Should GO trade be included in renewable energy targets?

Peter Holzapfel 55
Agenda

• GHG emissions – Country level & sectors

• Energy related emission & Renewable energy

• Accounting of electricity related emission

• Challenges for Double Counting

• Nuclear Energy - Input for Discussion

Questions and comments

are always welcome!
☺
Peter Holzapfel
Emissions of energy generation

58

https://ourworldindata.org/safest-sources-of-energy
Renewable Energy Challenges

https://www.agora-energiewende.de/service/agorameter/chart/power_generation/01.10.2020/17.10.2020/today/
• Variable energy sources e.g. wind and solar energy

• Nuclear power generates base load

Peter Holzapfel 59
Cost analysis

Renewables Fossil fuels Nuclear energy

Capital costs $1,150 – 1,550/kW 4 $700 – 8,400/kW 4 $6,500 – 12,250/kW 4

Insurance costs $0.71 – 7.05/MWh 6

(own calculation)
Subsidies / tax Global ≈26% ($166 Global ≈70% ($447 Global >3% ($21 billion) 2

reliefs billion) 2 billion) 2

LCOE (new $29 – 267/MWh 4 $41 – 206/MWh 4 $112 – 189/MWh 4

plants)
CO2e emissions 7 – 55 kg/MWh 1 506 – 1,168 kg/MWh 1 3.7 – 120 kg/MWh 1

Total costs $31 – 280/MWh $161-484/MWh $113 – 215/MWh

(LCOE + CO2e)

The levelized cost of electricity (LCOE) is a measure of the average net present cost of
electricity generation for a generator over its lifetime.

Peter Holzapfel 60
Global Nuclear Power Generation

https://ourworldindata.org/nuclear-energy
Peter Holzapfel 61
German Nuclear Power Phase Out

• The three main nuclear disasters:

https://www.bmu.de/themen/atomenergie-strahlenschutz/nukleare-sicherheit/aufsicht-
– 1979 Three Mile Island, United States

– 1986 Chernobyl, USSR (now Ukraine)

– 2011 Fukushima, Japan

• German nuclear power phase-out

ueber-kernkraftwerke/kernkraftwerke-in-deutschland
– 2011: Thirteenth Amendment to the
Atomic Energy Act

– Immediate shut down of 8 power plants

– Complete phase-out until 2022

– Further amendments in 2015 and 2017 in

the Fourteenth and Fifteenth
Amendment to the Atomic Energy Act

– Future amendments supposed to address

questions of radioactive waste storage and
compensation for energy providers
Peter Holzapfel 62
 What is your
opinion?

… and Why?
☺
Thank you for your attention!

Technische Universität Berlin

Department of Environmental Technology
Chair of Sustainable Engineering